Political uncertainty in Italy continues to weigh heavily on the common European currency. Despite starting the day with low volatility on Tuesday, bears grew in strength mid-session and consequently pushed the pair 88 pips lower. This fall was stopped by the weekly S2 at 1.15255. This level is likewise a new ten-month low for the rate.
Technical indicators are located in the oversold territory. This should point to a soon recovery. However, it seems that the given political uncertainty is dominating over any technical signals this week, suggesting that the pair might still edge lower down to the bottom channel line or the weekly S3 at 1.1450 and 1.1405, respectively.
In terms of resistance, the Euro faces the 55– and 100-hour SMAs circa 1.16. This level should not be surpassed in this session.
